Private downpayment-assistance programs generally lead to lower-quality Federal Housing Administration loans with inflated property values and higher defaults, according to a study commissioned by the Department of Housing and Urban Development."The report concludes that seller-funded downpayment assistance has led to underwriting problems that require immediate attention," HUD said in response to the March 1 study by Concentrance Consulting. Rep. Patrick Tiberi, R-Ohio, and David Scott, D-Ga., have introduced a bill that would allow the FHA to offer a zero-downpayment product that could be a safer alternative to PDA programs. At a congressional hearing, Rep. Tiberi said he introduced his bill to allow the FHA to pilot its own zero-down program because he is concerned about problems associated with private PDA programs. In a statement submitted to the House Financial Services subcommittee on housing, FHA Commissioner Brian Montgomery said, "The new zero-down program would offer all creditworthy but cash-poor working individuals and families the FHA advantage -- a safe deal at a fair price." The Washington-based consulting firm recommended that HUD take several actions to mitigate the risk of PDA programs, including implementing its own zero-down program.
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Ohio-based Liberty Home Mortgage joins several companies who started using a more modernized FICO credit score for nonconforming mortgage originations recently.
11h ago -
The CFPB has dissolved the Office of Supervision, Enforcement and Fair Lending and eliminated the job of associate director in a move that impacts how it designates nonbanks for supervision.
April 17 -
The plan that the Federal Housing Finance Agency floated calls for Freddie Mac to actively invest in some new closed-end seconds as cash-out refinancing subsides.
April 17 -
The push comes amid what one expert highlighted as lax funding efforts for two Department of Housing and Urban Development grant programs.
April 17 -
Conventional lending drove volumes higher, particularly in the purchase market, the Mortgage Bankers Association said.
April 17 -
Net charge-offs at the Charlotte, North Carolina-based bank increased by more than 80% in the first quarter compared with a year earlier. BofA executives say that the rising losses were in line with the bank's risk appetite.
April 16